From April 4, about 9,000 UK companies – those with 250 employees and more – are obliged by law to publish their ‘gender pay gap’ on a UK governmental website. This information is public. Everyone who cares can have a look. It compares the median pay of men and women within a company. So far nearly 10,000 companies have submitted data.
This does not reflect upon the question of equal pay, which demands that men and women in the same job should have the same salary – a demand legally enshrined for almost half a century in most industrialised countries and based on the human rights understanding that all people should be treated equally, irrespective of their gender. A confusion of these issues is commonplace, sadly even among politicians.
GPGs instead focus on the fact that vastly more women are working in lower paid jobs than men. Sixty-two per cent of half time labour in the UK is done by women. Ninety-three per cent of all chief executives of the 100 biggest UK companies are men. Senior partners in British law firms are almost exclusively male. Only very few airline pilots are female, to give but a few examples of male domination at the workplace.
This reflects not only biased choices of employers, who still hold on to the concept of women alone taking care of childrearing, but also educational and professional choices of women, influenced by tradional stereotypes and parental role modelling.
Malta always used to look good in this respect, with a much lower gap than most European countries, although this trend has reversed lately, from 7.7 per cent in 2011 to 11 per cent in 2016 (UK 18.4 per cent).
A possible cause could be the increase in fintech and IT jobs, which favours geeky professions like mathematicians and programmers – traditionally a male interest.
Gender does not matter. Gender bias in running a business certainly does
Another possible reason could be higher female work participation. Housewives who are usually paid nothing for their hard work at home are statistically non-existent after all, until they pick up a job, often later in life, lacking work experience and advancement on the job ladder.
The question of GPGs is further complicated by an often misogynistic, degrading work atmosphere (Me Too), the realisation that gender biases are often intersecting with other forms of oppression like class, skin, age, colour or religion (intersectional feminism) and a growing fluidity of gender definition, where sex may soon become a matter of individual choice – some schools in the UK let students already chose their gender freely, which includes a student’s choice of bathrooms and lockers.
We have come a long way already. When I worked as a sophomore on a vacation scheme in Vienna’s city parks back in the 1970s, the male gardeners handled machinery while the female workforce had to bend down and weed the flower beds. They were endearingly summarised as c***s. Not to degrade them, but to specify them as a labour unit. They were as a matter of course paid substantially less than we men.
As this example easily illustrates, the question of equality in pay, dress code, handling, job opportunity, advancement and work ethics matter for us investors immensely. A company which provides a more contemporary working environment will make better use of talent pools, and hence be more profitable in the long run. Harvey Weinstein’s production company went bust soon after his antics became apparent, for instance. Consumers of goods and services will be increasingly reluctant to support companies with sleazy ethics and take their custom elsewhere. They demand social responsibility – be it in tax affairs, the environment or the merit-based treatment of all workers.
The gender pay gap is perhaps a crude yardstick. Nobody expects things to change overnight. But a gradual shift of gender distribution will be telling. This brings me to a point where I fear that the fight for gender equality could be derailed. It is often claimed, proactively, that women share character traits which let them excel over men in leadership roles. “Women are more risk averse”, “better team players”, “less testosterone-driven”, “have a better sense of fairness”, we hear. The world would be a better place if ruled by females. The financial crisis would not have happened; even wars would not happen. This is of course bonkers. No woman in a leading position would ever handle affairs differently. Women are prone to the same emotions, the same mistakes, the same triumphs.
Every rational economic being decides logically on the basis of known facts, whether male, female, gay, or transgender. To mystify women is sexism in disguise. As investors we should acknowledge merits and failure beyond the sex, or sexual preferences, of a chief executive.
When the rather disastrous CEO of Hewlett-Packard, Carly Fiorina, relinquished her position after years of infighting in 2005, HP’s shares jumped 6.9 per cent on the NYSE. Shareholders were not happy to get a man back for the job but hoped for someone more qualified. When Carolyn McCall, CEO of EasyJet, stepped down, after years of paramount, well-executed growth, shareholders were not enthused and the share price dropped accordingly.
I bemoan the fact that only very few directors of US and UK corporations are female, not because I believe as an investor that girls are inherently better leaders but because it shows that many companies are old-fashioned and not fit for our time. Gender does not matter. Gender bias in running a business certainly does.
This is why a company like Unilever – purveyor of PG tips, Dove soap, Persil, Hellman’s mayonnaise and Ben & Jerry’s ice cream – under the leadership of a well-paid man, Paul Polman, looks so promising to us investors. One of the first corporations to make their GPG public, they reported a gap of minus 2.2 per cent, which means that the median pay of their female workforce is actually higher than the male’s. Not enough for them to rest on their laurels. On the level of higher management, GPG is still 14.9 per cent, leaving, as they readily admitted, space for improvement.
Unilever now regularly publishes its carbon footprint too, aiming to go carbon neutral in 2020, and scrupulously weeds out unsustainably produced commodities and bad work practices on the side of their countless suppliers. It may well be that when Polman retires at the end of 2018, that shareholders will get frightened and will dump the shares. Or perhaps they will give a cheerful welcome to the next CEO, who will pick up the baton and carry with skill and determination Unilever’s 169,000 employees and 2.5 billion daily customers into the next decade.
It might as well be a woman, but we investors should hardly care less.
Andreas Weitzer is an independent journalist based in Malta. He reports on the economy, politics and finance. The purpose of his column is to broaden readers’ general financial knowledge. It should not be interpreted as presenting investment advice or advice on the buying and selling of financial products.